Jan 24, 2025
You’ve saved what you could, and now at age 51, the itch to ditch your full-time job is irresistible. Retirement seems possible, but do you have enough savings to last for the long haul?
Let’s consider the scenario of a woman with $400,000 in savings and a deep desire to escape her full-time job. With a nest egg that significantly beats today’s retirement savings median — $115,000 for those aged 45-54, according to the Federal Reserve — it’s natural to think retirement is within reach, even well before most workers typically hang it up.
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The trick is stretching that sum across the retirement horizon of 30 or more years. Can you swing it with part-time work and a lean budget? The answer is yes. But only if you’re ready to create a plan and stick with it.
What to consider before switching to part-time work
You’re not alone in considering part-time work to bridge your way out of the 9-to-5 grind. Pew Research analysis from 2023 shows nearly 20% of Americans ages 65 and older were employed. Many find that part-time jobs offer the perfect balance of a paycheck, some structure and less stress. So is $400,000 enough to retire now while supplementing your income with part-time work? Let’s break it down.
You’ll need a calculator to determine your annual expenses. For example, if you spend $40,000 per year, your $400,000 savings can cover $16,000 annually using the 4% withdrawal rule.
Consider your potential pay at Costco, which recently raised its wage for many of its hourly workers to $19.50 an hour. If you gained one of those jobs, you could expect to earn about $24,000 per year from part-time work for 24 hours a week, which puts you right at what you’d need for everyday expenses.
If your debt load is light and your housing and other daily costs are low, you might consider a more conservative annual draw on your retirement, such as Suze Orman’s recommended 3%. At some point, your Social Security benefit will add an extra cushion, but you’re still 11 years away from being able to tap into that safety net.
Though you’re younger than the typical retiree, that doesn’t mean you don’t have to think about health care costs. Since Medicare won’t kick in until you’re 65, private insurance or marketplace plans could cost you $10,000 to $15,000 annually, depending greatly on your health condition. Building this into your budget is critical, and a Health Savings Account (HSA) can offer tax advantages if you qualify.
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Boosting income and savings in retirement
You’ve already taken an important step by preparing for part-time work. But there are ways to increase your income even if your part-time income and savings don’t appear to completely cover your needs.
Start by considering how you can downsize your home. Selling your property can generate cash while moving to a smaller, more affordable spot can free up monthly income and reduce your ongoing maintenance and property tax expenses.
Next, turn your attention to how your money is working for you. Are you invested in a way that can maximize returns and stretch your money across your retirement years?
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Diversification is a great start here. A varied portfolio — filled with passive income streams such as dividend-paying stocks, real estate investment trusts (REITs) and low-cost index funds — are excellent options for generating steady returns.
For those wary of market volatility, Treasury Inflation-Protected Securities (TIPS) can safeguard against rising costs. You could also consider renting out a spare room through Airbnb or monetizing a hobby to add to your income without requiring significant effort.
Finally, cutting back on discretionary spending and embracing cost-saving habits like secondhand shopping or meal prepping can reduce expenses and preserve your savings. Tracking every dollar with a budgeting tool can keep you accountable.
Navigating inflation and Social Security uncertainty
Rising health care costs are a major concern for early retirees. Cut your risk by joining prescription discount programs and shopping for competitive insurance rates annually.
Additionally, delaying Social Security benefits until your full retirement age or later can significantly increase your monthly payout. If you can rely on part-time income and savings in the interim, this strategy will pay dividends in the long run.
Investing in assets that outpace inflation, such as equities or TIPS, can help protect your savings. Staying proactive with your investments ensures your money keeps working for you even as the cost of everyday goods creeps higher.
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
The bottom line
With $400,000 in savings, retiring at 51 and transitioning to part-time work isn’t just a pipe dream — it’s a realistic goal, if you’re willing to plan and stick to a disciplined approach.
After all, retirement doesn’t have to be all-or-nothing. By blending part-time work with a frugal lifestyle and smart financial planning, you can leave the job you hate behind and build a retirement that works for you.
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Chris Clark is a Kansas City–based freelance contributor for Moneywise, where he writes about the real financial choices facing everyday Americans—from saving for retirement to navigating housing and debt.
